The Shiba Inu (SHIB) price has weathered a turbulent period amid a broader altcoin sell-off, retreating over 22% from its monthly high. Despite the downturn, multiple technical and on-chain indicators suggest that a rebound could be on the horizon. The cryptocurrency has found strong support at key technical levels, while network activity and token burn metrics point to sustained investor confidence. This article explores the factors that may fuel a SHIB recovery in the coming weeks.
Shiba Inu Price Gains Strength from Rising Token Burns
One of the most promising signs for Shiba Inu’s recovery is the dramatic increase in its token burn rate. Data shows that on December 18, the burn rate surged by an astonishing 4,766%, removing more than 5.2 million SHIB tokens from circulation. This spike contributed to a cumulative total of over 410 trillion SHIB tokens burned to date, reducing the circulating supply to approximately 584 trillion.
👉 Discover how token burns can influence market dynamics and create long-term value
Token burning plays a crucial role in shaping SHIB’s economic model by introducing deflationary pressure. A reduced supply, all else being equal, can increase scarcity and potentially drive price appreciation. These burns occur through both voluntary contributions and automated mechanisms within the Shiba Inu ecosystem—particularly via Shibarium, the network’s Layer-2 scaling solution, and ShibaSwap, its decentralized exchange. Fees collected in BONE tokens are periodically converted into SHIB and permanently burned, reinforcing a self-sustaining deflationary cycle.
This growing commitment to supply reduction signals strong community engagement and long-term belief in the project’s fundamentals—key psychological drivers in crypto markets.
Stable On-Chain Activity Signals Investor Confidence
Even as SHIB’s price corrected sharply, on-chain metrics reveal remarkable resilience among holders. According to blockchain analytics platform IntoTheBlock, new SHIB wallet addresses increased by 9.10% over a recent seven-day window. Meanwhile, active addresses declined by only 5.96%, a minimal drop given the broader market selloff.
The total number of Shiba Inu addresses holding any balance now stands at 1.37 million, surpassing the 30-day average of 1.35 million. This upward trend indicates that despite price volatility, users continue to join or remain active in the ecosystem.
Such stability is significant. In past bearish phases, sharp price declines often triggered panic selling and a collapse in user activity. The current data suggests that SHIB holders are adopting a more strategic, long-term approach—refusing to capitulate even during market stress. This kind of behavior often precedes bullish reversals, as strong hands absorb selling pressure and lay the foundation for accumulation.
Technical Analysis: SHIB Holds Critical Support Levels
From a technical perspective, Shiba Inu has demonstrated resilience by defending key support zones. The 50-day moving average has acted as a robust floor since September, with price repeatedly bouncing off this level without breaking below it. Additionally, the Ichimoku cloud indicator continues to provide dynamic support, reinforcing the notion that the medium-term trend remains bullish.
A notable pattern forming on the daily chart is the cup and handle (C&H) formation, with the upper boundary near $0.00002941. This pattern typically develops after a prolonged consolidation and signals a potential continuation of an uptrend upon breakout. The "cup" reflects a rounded bottom following a pullback, while the "handle" represents the final retest of support before upward momentum resumes.
Currently, SHIB appears to be consolidating within the handle phase. If historical patterns hold, a breakout above $0.00002941 could trigger a rally targeting **$0.0000477**—calculated by measuring the depth of the cup and projecting it upward from the breakout point.
However, traders should remain cautious. A decisive close below $0.00002275—the lowest swing point from November 15—would invalidate the bullish setup and could open the door to further downside.
👉 Learn how technical patterns like cup and handle can help predict future price movements
Frequently Asked Questions (FAQs)
Why is Shiba Inu price falling?
The recent decline in SHIB’s price mirrors broader weakness across the altcoin market. As investor sentiment cools and capital rotates out of risk-on assets, many cryptocurrencies—including SHIB—experience downward pressure.
Is there a bullish case for SHIB?
Yes. The coin has held critical support at the 50-day moving average and remains above the Ichimoku cloud, both indicators of underlying strength. Combined with rising token burns and stable user activity, these factors support a potential rebound.
What is SHIB’s next price target if it rebounds?
The immediate resistance lies at $0.00002941**, the upper edge of the cup and handle pattern. A confirmed breakout could propel prices toward **$0.0000477 in the near term.
How do token burns affect SHIB’s value?
By permanently removing tokens from circulation, burns reduce supply over time. With demand remaining steady or increasing, this deflationary mechanism can enhance scarcity and support price growth.
Are investors selling off SHIB?
On-chain data suggests otherwise. While price dropped 22%, active addresses remained stable and new wallet creations increased—indicating no widespread panic selling.
Can SHIB recover its recent losses?
Given its strong technical support, healthy on-chain metrics, and active ecosystem participation, a recovery is not only possible but increasingly likely if broader market conditions stabilize.
👉 Explore real-time data and tools to track SHIB’s price action and on-chain trends
Conclusion
Shiba Inu is navigating a challenging market environment with surprising resilience. While short-term volatility persists, fundamental and technical indicators paint an optimistic picture for the medium term. The combination of aggressive token burning, stable user engagement, and a constructive chart pattern suggests that SHIB may be setting up for a meaningful rebound.
Investors should monitor key levels closely—particularly $0.00002941 for breakout confirmation and $0.00002275 as a critical support threshold. With ecosystem development ongoing and community momentum intact, Shiba Inu remains a project worth watching in 2025.
Keywords: Shiba Inu price, SHIB rebound, token burn, cup and handle pattern, active addresses, 50-day moving average, Ichimoku cloud, on-chain analysis.